There is something in me which, when it sees to related numbers, wants to immediately do a calculation, so when I saw a news story stating that the $215 billion in stimulous money given out thus far had resulted in 640,329 jobs, my first question was, “How much is that per job?”
Not too shabby, eh? I’d like one of them jobs just fine.
Now that I’ve had my sticker shock fun, let me be fair: if you’re going to try to create jobs by flooding money into a set of projects, the cost if obviously much more than the cost of a salary. Say I decide to help a bakery create jobs by buying doughnuts. Buying $5000/month worth of doughnuts doesn’t create a $60k/yr at the doughnut shop, because although there’s need for more work, there’s also need for dough, and cooking oil, and glaze, and more doughnut machines, etc. I might well have to spend $200k per year at the bakery in order for them to add $100k to their payroll, perhaps even more.
But what that emphasizes is that simply spending money like a drunken sailor (no disrespect to our naval readers) is not a very efficient way to help people who are out of work in the near term. The two most direct ways to help people out of work would be through providing longer unemployment benefits (and more programs to help people in problem industries to get new training) and to provide companies with direct payroll relief by reducing employer contributions to payroll taxes.
This is something we’ll do well to keep in mind as Democrats on Capitol Hill start to get itchy for a second round of stimulous in order to emphasize that they are “doing something” about the increasingly grim job numbers.